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lomework Connelly Inc a manufacturer of quality electrice cream makers, has experienced a steady growth in sales over the pas
Reg 1 Reg 2 Req3 Req 4A Reg 4B Req 4C Req 5 Prepare a contribution income statement at the new breakeven point. CONNELLY, INC

Only need help with 4b.
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Answer #1

break even units:

total fixed costs = (726,500+247,010) =>$973,510.

contribution per unit =$80 selling price - $43 variable costs

=>$37 per unit.

break even unit = $973,510 / $37.

=>26,311 units.

Contribution Income statement:

sales revenue (26,311 units*$80) 2,104,880
less: variable costs (26,311 units*$43) (1,131,373)
contribution 973,507
fixed costs
original amount 726,500
incremental amount 247,010
total fixed costs 973,510
net income / (loss) ($3)

though the net income should be $0 at break even units, we are getting $3 loss due to rounding off of break even units to 26,311 units.

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